One of the most significant events in Bitcoin’s lifetime is set to occur for the third time in May 2020. Will the halving event cause a crash or boom in the market? How will miners adjust to half of their revenue being cut?
The halving of Bitcoin (BTC) and Bitcoin Cash (BCH) block rewards from 12.5 coins to 6.25 coin is fast approaching on May and April 2020 respectively. Bitcoin.com spoke to some established SHA-256 miners in preparation for the upcoming World Digital Mining Conference to be held in Frankfurt, Germany this month discussing the possible events that will succeed the halving.
Experienced miners discuss halving
Big names in digital asset mining were featured in the video including Hugh Tian, Co-founder of Antpool, Marco Streng, CEO of Genesis Mining; Thomas Heller, F2Pool Global Business Director; Sean M. Walsh, CEO & Chairman of the Board, Hyperblock Inc.; among others.[embedded content] [embedded content]
A number of the guest speakers expect the price to crash after the halving while others are more optimistic calling $20,000 USD on the price after the event. Whatever the view, one thing seems constant on every speaker, the magnanimous event will impact Bitcoin heavily in one way or another – in prices, network hash rate, and miners’ revenue.
A brutal wipe out event for small miners
On the subject of professional mining industry, Marco Streng explained the field will not be too rosy for small and inefficient miners after the halving as the revenues drop significantly.
“The halving is a brutal wipe-out event. It knocks out immediately the miners who are not efficient enough and shows no mercy. It’s very brutal in that regard to miners.”
Nick Damico, CTO at BitPatagonia, is of the same view as competition to mine BTC increases across the industry. He said, “It’s going to be a very difficult time for less efficient miners and the smaller miners.”
Ambiguity in price movements of Bitcoin (BTC)
The price of BTC once halving occurs is causing a great debate across the cryptocurrency industry with some believing a downward spiral on the price following the halving. Jihan Wu, Bitmain’s CEO, said in October he does not believe the halving will cause a bull market as seen in previous cycles.
Despite the doubts, Sean Walsh believes the price trajectory will follow previous halving events with the exchange rate compensating for the drop in mining revenue.
“It is a bit scary being a miner and knowing that your revenue stream is going to get cut in half over night but the exchange rate will more than compensate for the reduction in our bitcoin denominated revenue.”
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